National Debt Hits $12 Trillion, Will Double By 2019

Barack Obama has been president for just under 10 months but he’s added two trillion to the national debt and will double it by the end of the decade. CBS’ Mark Knoller:

This latest milestone in the ever-rising journey of the National Debt comes less than eight months after it hit $11 trillion for the first time. The latest high-point is not unexpected, considering the federal deficit for the just-ended 2009 fiscal year hit an all-time high at $1.42-trillion — more than triple the previous year’s record high.

Much of the increase in the deficit and debt is attributed to government spending outpacing revenue — both exacerbated by the recession and the government response to it — including hundreds of billions in bailouts and stimulus spending and tax cuts along with decreased tax revenues due to rising unemployment.

[…]

The National Debt has increased about $1.6 trillion on Mr. Obama’s watch, though less than $4.9 trillion run up during the presidency of George W. Bush.

But the White House budget review issued in August projects that by the end of the current fiscal year on Sept 30th, the National Debt could top $14 trillion. It gets worse. The same document projects that by the end of the decade, the National Debt will hit $24.5 trillion — exceeding the Gross Domestic Product projected for 2019 of $22.8 trillion.

According to the Treasury Department, the debt stood at $5.727 trillion on January 19, 2001, Bill Clinton’s last day in office, and $10.627 trillion when Bush left office eight years later. That’s $612.5 billion (or $0.6125 trillion) a year, during which we fought two major wars, had the 9/11 attacks, and at least two major bailouts to deal with a global financial crisis.

We’re thus far averaging $1.92 trillion a year under Obama, or a factor of 3.146 more. And the government is projecting that we’ll continue spending at this crisis rate for the next decade, more than doubling the current record level?

That ain’t good.

Presumably, we’d have had another major bailout had Bush stayed in office for a third term (were that Constitutionally or politically possible) or had John McCain been elected. So spending and thus the debt would have escalated substantially regardless. But we likely wouldn’t be talking about adding a massive health care payment on top of the pile.

Nothing would have changed no matter who was elected because the single biggest reason for the deficits over the last two years and into the future (assuming nothing changes) is declining tax base. Fewer jobs fewer … tax payers, it’s just that simple. Cutting taxes would be suicide even with offsetting spending cuts because that would only trim more jobs.

The problem is that conservative don’t read their bible, you don’t cut taxes during the years with the fat cows, you increase taxes, and pay down debt so you can spend when the cows are thin. It’s not Obama’s fault that they could never grasp this simple concept.

Barack Obama has been president for just under 10 months but he’s added two trillion to the national debt and will double it by the end of the year.

And then here you remove most of the blame:

So spending and thus the debt would have escalated substantially regardless. But we likely wouldn’t be talking about adding a massive health care payment on top of the pile.

The health care bill hasn’t passed yet. Taking that out of the equation, Obama and the current Congress haven’t really added much totally new debt at all (relatively speaking). Maybe a few hundred billion, but not $2 or $4 trillion.

The problem with our politicians of either party really is basically what Rick DeMent says … they just don’t have the balls to save when the economy is good. While nobody can possibly agree with everything Obama and this Congress have done, they were dealt a shit hand (and yes, I realize that they are the dealers as well, for the most part).

Well, if it were Bush’s third term or McCain’s first, the stimulus would have been a tax cut vice a funneling of tax dollars to favored constituencies and there’d be a veto standing between the massive increase in costs of healthcare and cap and trade and small businesses trying to grow.

The debt is bad, no doubt but the problem is the FUD created by the Dems legislative priorities.

Ya know, you can make a voluntary contribution to paying off the deficit on your tax form. (It’s deductible too!) Almost no one does it…I think the program got a whole $3 million last year…and probably for good reason. We howl and whine and kvetch and moan about paying taxes, but left to our own devices, would we do it?

Of course not.

On the same token, if you were a politician and your constituents were crying for wars, border fences, and tax cuts….would you lift a finger to lower that deficit?

Of course not! Better to just blame it on the other guy and hope no one notices.

A little thing like “the Great Recession” is not even on your trolling radar.

There’s no doubt that the economic crisis played a large part in this spending. But, again, Bush had the front end of the same crisis and two wars.

McCain would have added approximately the same trillions. No one was going to let the Great Recession tip to Depression.

McCain would have faced similar pressures and was hardly principled in handling the previous bailout. But Obama barely got this monstrosity through, so I think a President McCain would have spent far less.

And most of what’s been allocated is for the out years. “Stimulus” proved to be just what I argued it was at the time: An excuse to spend money that they already wanted to spend.

There’s no doubt that the economic crisis played a large part in this spending. But, again, Bush had the front end of the same crisis and two wars.

Two things:

(1) The Recession doesn’t add to the deficit simply as a result of more spending; it also adds to the deficit because the government collects less revenue.

(2) Bush may have fought two wars, but Iraq was a war of choice and once al-Qaeda training operations were disrupted in Afghanistan, that war became a war of choice, too. He’s still responsible for spending that money. The wars aren’t an excuse for large deficits–they’re part of the cause.

If your goal, as stated, is the redistribution of wealth. Obama is doing a great job. But the money is not going to anything that will fix the problem. If you really think McCain would have signed a stimulus bill the size of the one Obama signed? Check to see how he voted on the one that passed, unread. Government is not the solution. Government is the problem.

(1) The Recession doesn’t add to the deficit simply as a result of more spending; it also adds to the deficit because the government collects less revenue.

(2) Bush may have fought two wars, but Iraq was a war of choice and once al-Qaeda training operations were disrupted in Afghanistan, that war became a war of choice, too. He’s still responsible for spending that money. The wars aren’t an excuse for large deficits–they’re part of the cause.

No doubt on either front. My point is that, despite massive spending by Bush, Obama’s still outdoing him 3 to 1.

“The problem with our politicians of either party really is basically what Rick DeMent says … they just don’t have the balls to save when the economy is good.”

Anybody remember who was President after George H. W. and before George W.? And how this President ran a surplus? And which party refused to vote for his tax hikes? And which Vice President said that “Deficits don’t matter”?

What a lame rebuttal of Obamas massive spending, “well McCain would have done the same thing even though he voted against itâ€. It is highly unlikely that McCain would have pass as massive with no GOP input that was full of DNC pork, done in secret in middle of the night that line Dems pockets bill like Obama did. Most of the other massive plan spending would never happen either. When will Obama and the Dems take any reponsibility for any of their lame actions?

Alex, I’ll give you credit for being half right, assuming you were not being facetious. Cut taxes and cut spending. You bemoan the loss of revenue in a down economy. True enough, cut taxes if you want to see the economy revived. Cutting spending alone won’t do it.

But no level of raising taxes and killing the economy (or lowering taxes to get more revenue from a revived economy) will be sufficient unless spending is brought under control. Oh, and it isn’t defense spending that is breaking the bank. It doesn’t help, but it continues to be drawfed by non-defense entitlement spending. Why don’t you get off your hobby warhorse and address these as well?

As James and many others noted, the Stimulus package was an exhaustive Christmas list the Democrats had been working on for a long time, deciding who was naughty and who was nice. It had little to nothing to do with stimulating the economy.

Apparently many here are too young to remember the Carter years when the economy was much worse than it is now. Please stop embarrassing yourselves by calling this a great depression. It isn’t. At least not yet, but we do seem to be our damnedest to get there.

Alex, I’ll give you credit for being half right, assuming you were not being facetious.

Of course I was being facetious.

True enough, cut taxes if you want to see the economy revived.

Which taxes? By what percentage? Just cutting taxes alone doesn’t mean that there will be a good economy. If you don’t believe me, feel free to move to Somalia, where they have a tax rate of zero…

By contrast, there are countries, such as Denmark, which economically outperform the United States despite having much higher taxes.

There is no doubt that if taxes are too high, they are impediment to economic growth. We do not live in a country where taxes are too high. If we were, we would not be facing $1 trillion + deficits.

Oh, and it isn’t defense spending that is breaking the bank. It doesn’t help, but it continues to be drawfed by non-defense entitlement spending. Why don’t you get off your hobby warhorse and address these as well?

Because I agree with Founding Father Thomas Paine, economist Friedrich Hayek, and father of economics Adam Smith that a decent and just society provides a safety net for its members. Which is not to say that there isn’t room for cuts there, but Defense spending comprises over 1/4 of total federal expenditures. That’s absurd.

Apparently many here are too young to remember the Carter years when the economy was much worse than it is now.

Actually, the last time unemployment was this bad was 1983. Carter was not President then.

No doubt on either front. My point is that, despite massive spending by Bush, Obama’s still outdoing him 3 to 1.

Not unless you count the deficits created by lower structural deficits, which you really can’t because that not new, it was happening when he took office. you can count the stimulus but that’s chump change when you average it out over the two are three years they are spending it, oh take out the almost 400 or 500 billion in tax cuts which I’m sure you would never object to.

No doubt on either front. My point is that, despite massive spending by Bush, Obama’s still outdoing him 3 to 1.

This is plainly ridiculous. Obama is directly responsible for about 1/3 of the current budget deficit. The NY Times did a break down of the policy and conditions that led to the deficit, and the majority of the deficit is cause by a combination of reduced revenue from the recession and Bush’s tax cuts.

If Obama racks up $15 trillion dollars in new debt, you can say he’s outdoing Bush by 3 to 1.

If you should happen to develop a chronic symptom, say belly pain or headache, the doc you consult will invariably go back to the first manifestations of your complaint. One has to understand how it started, was there anything that could relieve it, and why it is progressive.

The chronic symptom in this case is the escalating National Debt. Like any symptom which can be mapped out by a series of questions (what makes it better, what makes it worse, is it modified by position) the National Debt can be examined by through different lenses. The simplest and most often repeated graph is this one of National Debt versus Gross National Product. If one asks a mapping out question, for example what is this year compared to last year over a period of time, or New Debt Annually, the graph looks like this one.

These graphs pin point when the problem started, and gives insights into what policies perpetuated them. When James Joyner comes up with this lovely:

“No doubt on either front. My point is that, despite massive spending by Bush, Obama’s still outdoing him 3 to 1â€

He fails to identify the root cause of the problem that Obama has to deal with, but also the forces that are perpetuating these problems. What the presented graphs show is that problems started during the Reagan Administration, and were accentuated by both Bush pare and Bush fils Administration.

When the Great Charlatan managed to inculcate the American psychic with the evils of graded taxes and government regulation of industry a malignant ideology was introduced. As an adherent of this ideology, is it not unexpected that Dr. Joyner is unable to offer any solutions. Nor is it unexpected that he would end the post by bringing his personal bÃªte noire to the fore, to wit:

But we likely wouldn’t be talking about adding a massive health care payment on top of the pile.

Of course you wouldn’t add health care payment to the National Debt, but neither would you advocate tax increases, or major cuts in Defense spending. Where I come from it is called nihilism.

I don’t think McCain would have passed the stimulus, if he had won-at least not as constructed-I figure he would have passed some kind of stimulus.

I really don’t think the democrats in congress at this point (and they are the ones in charge at the moment) are really interested in cutting spending at all. I do not think Obama is interested in cutting spending. I will grant you that the GOP probably wouldn’t be much better, but they aren’t in charge of congress and haven’t been since 2006-they also own a pretty big piece of the deficit from 2006 to now.

The problem is that conservative don’t read their bible, you don’t cut taxes during the years with the fat cows, you increase taxes, and pay down debt so you can spend when the cows are thin. It’s not Obama’s fault that they could never grasp this simple concept.

Uhhhmmm Rick, I don’t think to many Conservatives consider The General Theory to be their bible. But yes, I do agree that politicians tend to play things exactly the opposite as they should be played.

Anybody remember who was President after George H. W. and before George W.? And how this President ran a surplus? And which party refused to vote for his tax hikes? And which Vice President said that “Deficits don’t matter”?

A lot of people posting in this thread have awfully poor memories.

Ahh you mean the exception that pretty much proves Rick’s point. Clinton didn’t have to risk much political capital to run that surplus. Yes the tax increases were somewhat contentious, but given the economy was 2 years into an expansion it wasn’t that big a deal. Of course Clinton also benefitted from a bubble economy as well.

This is plainly ridiculous. Obama is directly responsible for about 1/3 of the current budget deficit. The NY Times did a break down of the policy and conditions that led to the deficit, and the majority of the deficit is cause by a combination of reduced revenue from the recession and Bush’s tax cuts.

No more ridiculous than all the sturm und drang when Bush started running deficits. He took office and the economy tanked. Revenues dropped, he cut taxes increased spending and deficits went up. But according the current arguments that is what he was supposed to do.

Of course Bush’s deficits in the initial years were much smaller, but one could argue the recession was much more mild. I guess the real test of Obama’s fiscal side will come when the economy is in expansion again. If he moves to reduce spending and reign things in…well good.

Of course he is going to be in for a rough time on that front given that he is increasing the governments role in health care substantially. But on the plus side he is also making hiring new workers less desirable so maybe the recession will drag on.

If Obama racks up $15 trillion dollars in new debt, you can say he’s outdoing Bush by 3 to 1.

Well, he is close to being on track. Granted 25 billion is only about 2 to 2.5 times as bad a Bush….

BTW, I gave you a WSJ reference in which a set of economists said exactly the opposite.

Here’s the direct link.

Denial noted.

Really? I don’t think they are saying “exactly the opposite”. Here are some quotes:

We need many quarters of GDP running at this pace (or faster) to make significant inroads into reducing unemployment. —RDQ Economics

The fact that the economy exceeded expectations of a 3% rise means that the growth bulls will maintain their 3.5% fourth quarter growth assumptions; however, the stress line in the economy showing through in the latest data still keeps my double dip scenario alive. Now the focus shifts to the labor market and the upcoming auto sales numbers to assess the sustained ability of the rebound. —Steven Ricchiuto, Mizuho Securities

The final handful of dirt on the Great Recession’s grave: today’s data provides a needed psychological end to seven quarters of shrinking economic output. While there’s a great deal of uncertainty as to conditions for the coming few quarters and years, at least we can say the last few months have been good ones for output. We remain very much concerned, however, that the pace of consumer activity will slow sharply now that government spending incentives are expiring. Our overall impression on today’s data was positive, however. —Guy LeBas, Janney Montgomery Scott

The most important factor limiting growth will be households continuing to struggle with ravaged balance sheets and lingering labor market weakness. Moreover, many negatives related to sour commercial real estate loans, consumer lending, commercial & industrial loans, non-subprime mortgage lending, etc. are yet to be felt as far as banks and other creditors are concerned, while soft demand and substantial spare capacity will weigh on any recovery in capital spending. —Joshua Shapiro, MFR Inc.

I wouldn’t call that much of a ringing endorsement for the stimulus packages. In fact, a number of them say, in effect, “Yes, the incentives worked, but what about when they run out?”

Of course you wouldn’t add health care payment to the National Debt, but neither would you advocate tax increases, or major cuts in Defense spending.

Thank you Kreskin, but perhaps you should sit down before you hurt yourself and drink your metamucil.

Which taxes? By what percentage? Just cutting taxes alone doesn’t mean that there will be a good economy. If you don’t believe me, feel free to move to Somalia, where they have a tax rate of zero…

Happy to engage in that conversation, but you were admittedly being facetious, so I don’t view it as fertile ground for discussion. Your comment about Somalia adds nothing to the discussion, so what is its point?

By contrast, there are countries, such as Denmark, which economically outperform the United States despite having much higher taxes.

Are you suggesting that if only we scaled Denmark’s policies up to ours everything would be just like Denmark? Too bad we don’t have someone providing our security blanket for nothing, and the type of protectionism supplied by the EU, etc. Of course, having a largely homogenous population with a shared culture might help a lot too, but you’re not going to seriously advocate that for the USA are you? Lack of diversity is their strength!

There is no doubt that if taxes are too high, they are impediment to economic growth. We do not live in a country where taxes are too high. If we were, we would not be facing $1 trillion + deficits.

Utter BS. The deficit is caused by spending being out of control, not by taxes being too low. Oh, and I find it hilarious that you defend an administration with the single largest collection of tax scofflaws ever. But I digress.

Because I agree with Founding Father Thomas Paine, economist Friedrich Hayek, and father of economics Adam Smith that a decent and just society provides a safety net for its members. Which is not to say that there isn’t room for cuts there, but Defense spending comprises over 1/4 of total federal expenditures. That’s absurd.

And where did I advocate eliminating the safety net? You know, basic economic theory explains that if you want more of something all you have to do is subsidize it, which is what some of the anti-poverty programs have been doing for a long time. What constitutes poverty in the US these days is viewed as luxury by much of the world’s truly poor. There, now you have ammo to make out to be a really horrible person.

Actually, the last time unemployment was this bad was 1983. Carter was not President then.

So how do those cherries you picked taste? Unemployment is merely one metric for the state of the economy, not that President Obama has demonstrated much credibility or competence on that front. But perhaps you’ve heard of the misery index which was a major theme of the 1980 presidential campaign, one in which I voted, FWIW. Interest rates went up in the application of tough medicine to get the ship righted. But now we pretend that money can be free and debts can be taken on that don’t have to be repaid. I’ll check back with you in a few years to see how well that works out. Oh, and so long as President Obama is going to keep blaming Bush for everything under the sun I figure it will be fair to allow Reagan to blame Carter for the what he inherited, don’t you think?

In fact, a number of them say, in effect, “Yes, the incentives worked, but what about when they run out?”

Not exactly a ringing endorsement because we can’t keep such gimmicks up indefinitely. For example I think the Cash for Clunkers and the Housing incentives are simply time shifting future purchases forward. These are durable goods and are both unsustainable in that even if the programs continued such programs would be unlikely to provide a long term boost. People don’t need a new car every month or a new house. They tend to keep them for years.

Maybe you should sit down too before you hurt yourself and drink your metamucil too.

The health care plan projects out at about $100 billion per year. There is good reason to believe that it will have social benefits beyond health care, so there should be second order savings. There is at least an attempt being made to pay for it.

If the intent here is comparison with Bush, how does that compare with his Medicare expansion that was not paid for? Indeed, when the Medicare estimates were higher than the CBO estimates, they were suppressed. The very fact that the debt is even being considered, unlike with the Bush administration, makes this administration different. Bush had several good years to address the debt, but did not.

Bush cut taxes, income and capital gains, and we had a very slow expansion. Despite continued productivity gains, only a fraction of the top one per cent benefitted. The conservative rebuttal during those years? People have a real increase in wealth because their homes have appreciated in value. Cutting taxes without cutting spending leads to debt and increasing taxes. Any real cuts in spending require cutting entitlements. No one will do that.

Worng, the solution is to print, borrow, and steal money, and then give it to your voting blocks,waste it implementing it on a 100 plus years of liberal utopia dreams, and pork bribes to get these dreams voted on! How can some of you people see it any different?

Steve, there are many other costs not addressed in the health care bill that are going to make the costs rise dramaticelly. Also, you may not realize that the taxes start immediately but the benefits don’t, so it looks cheaper than it really is when your horizon is only ten years. This is an utter farce perpetrated by people who think money can continue to be taken from the populace and degraded with impunity from the lenders. Perception may offer a reasonable facsimile of reality for a while, but it doesn;t kast.

James didn’t say that the spending would have no effect, but that it was spending Democrats wanted to do anyways and the stimulus was just a pretext…hence much of the spending being in out years when the recession is likely going to be over.

You counter with a link that you claims says just the opposite. It says no such thing, and at best it says, “The incentives worked for that quarter…but what about when they expire, will it be enough?” Not exactly a ringing endorsement for the efficacy of stimulus spending ending a recession. Which is what I wrote after reading your link. Then you show and say, “Yeah I already said that, too!” Even though you didn’t. You said it was a clear counter-claim to James’ statement that the stimulus wasn’t so much about stimulus, but about spending they already wanted to do.

No goal post moving, but you simply not understanding the material you are presenting.

Yes, it is a stupid little game for you to misrepresent what James has written. You, Our Paul and micheal reynolds seem to have a rather bad habit with that.

Here, lets take it a step further. Over at Schuler’s blog there is a post on the “Blacks and Greens” talking about environmental policy. Somebody notes that if we are to move away from carbon based fuel one thing we’d need is the infrastructure to use alternative fuels for transportation.

I don’t argue that spending hundreds of billions of dollars has NO stimulus impact on the economy. Spending is spending.

What I argue is that:

1. The lion’s share of “stimulus” was spent on programs Democrats wanted, anyway, with the need to stimulate the economy a good excuse to spend it when it would have been otherwise imprudent or politically unsellable.

2. Most of the “stimulus” money was targeted for the out years and will therefore be spent well into the recovery.

I should be clear myself: This wasn’t the stimulus I would have designed. I probably would have leaned, with some OTB authors, toward aid to individuals and expanding the safety net rather than creating new programs. I would also, as I have said, look at what planned government spending could be brought forward, accelerated, to begin in the recession rather than after.

We call it “countercyclical spending,” in the Bible they talked about seven fat years and seven lean years.

I think the stimulus we got was somewhat “median” if not well balanced or even well designed. We had one wing of liberal economists saying we needed twice this stimulus, and they were saying “dig holes and fill them up.” On the other end we had the hard line “I don’t see a recession and I see no need for stimulus” rightists.

Maybe this is like healthcare, the political environment gave us a “solution” that was path dependent rather than rationally or moderately designed.

… things could have been better, but following either extreme would have been worse.

I probably would have leaned, with some OTB authors, toward aid to individuals and expanding the safety net rather than creating new programs. I would also, as I have said, look at what planned government spending could be brought forward, accelerated, to begin in the recession rather than after.

Me, too. I’d have gone much cheaper — and eschewed most of the corporate bailouts — but given pretty substantial aid to individuals. There’s such thing as a business cycle and global forces and creating a safety net for those crushed by those forces is reasonable enough.

Trying to prop up something as big as the American economy by throwing a bunch of money in the air, though, is ridiculously wasteful. Sure, all that money will help somewhat. But we’d be better off with less, better targeted spending.